Of dollars and cents

November 16, 1993

How can taxpayers save $400 million a year? Some members of Congress have a simple answer: mint a dollar coin and do away with paper $1 bills. That's a tall order, though, since the last attempt to coin the dollar failed spectacularly a dozen years ago. There are still a half billion Susan B. Anthony dollars languishing in U.S. Mint vaults.

The idea this time is to avoid the mistakes of the Anthony coin, which was too easily confused with a quarter. People hated it, and they simply wouldn't use it. So now we're stuck with the paper dollar. That thin, green, paper-and-silk rectangle seemed to have more value than the silver-tinted copper coin. Advocates of another try say that with a properly designed coin, with a truly distinctive look and feel, the elimination of the paper alternative would work.

They have a good argument. After all, a dollar buys a lot less than it did only a decade ago, and many goods and services purchased from automatic machines -- notably public transit rides -- now cost a dollar or more. So do a lot of foods purchased from vending machines. And those confections that do cost less than a dollar are close enough in price to require dollar-changing mechanisms.

It takes a far less sophisticated (and less expensive) electronic control to distinguish a fake coin from a real one than to spot a counterfeit bill. Several other countries have made the switch from bill to coin at roughly dollar equivalents without great outcry.

Best of all is the potential savings of $400 million a year. Coins cost more than twice as much to produce as bills, but they last decades, whereas paper bills wear out after only a few years -- if that long. And they would give the Mint a face-saving bookkeeping device for getting rid of those embarrassing "Suzies" without a (pun not intended) paper loss.

But a related monetary crusade, wiping out pennies, is probably still a lost cause. They are more of a nuisance to people and a serious burden to businesses, but they are not a drain on the U.S. budget. Unlike dollar coins, pennies are worth more than they cost to produce. And a lot of these small coins disappear from circulation, presumably into those jars that will be emptied someday.

Still, this time around we have an opportunity to become dollar wise, even while remaining penny foolish.